Job Growth Likely to Slow This Year: Goldman Sachs

Jan Hatzius, chief economist at Goldman Sachs, plows through April's employment data to see if the numbers will provide a long-term positive for the markets.

Job growth will probably decelerate in the near term and mute economic growth, but headline numbers will begin to strengthen in 2014, Goldman Sachs Chief Economist Jan Hatzius told "Squawk on the Street."

"I think you need to be cautious interpreting any individual number, but if you look at the broad report was good," Hatzius said on Friday's jobs number.

Although growth was largely in lower-wage occupations, the hourly wage was up. "From that perspective, you're not seeing a particular composition-induced weakness here," he said.

"It's quite possible" that employment numbers could get worse in the next quarter, Hatzius added. "Overall numbers—if you look not just at today's report but in general what has come out over the last couple of months—suggest pretty muted growth."

For the rest of the year, Hatzius said that "some deceleration wouldn't be very surprising," while fiscal issues in Washington also need to be kept in perspective.

"The impact of the sequester hasn't really shown up to a significant degree," he said. "I don't think we've seen quite as much as we would have expected to see at this point. I still expect to see more of an impact, but I think that is going to come in subsequent months.

"The impact will pick up in the short term," Hatzius said. However, he sees negative effects from fiscal policy and the payroll tax increase waning over the longer term. "I think you will see a pickup in growth" in 2014, he added.

The main story this year, Hatzius said, is that the private sector is much healthier than the lackluster headline numbers, including gross domestic product and unemployment, would indicate.